Thailand RE Law/Policy

Table of Contents

Last updated Aug. 23, 2023.

Electricity Sector Overview

The energy sector in Thailand is governed by the Ministry of Energy (MOE) and managed by the National Energy Policy Council (NEPC). The NEPC, through its secretariat, the Energy Policy and Planning Office (EPPO), recommends national energy policy, management, and development plans to the government through the cabinet and establishes the tariff structure for energy sales in Thailand.1Thailand Sector Overview, ADB, https://www.adb.org/sites/default/files/linked-documents/49087-001-so.pdf.

The sector is regulated by the independent Energy Regulatory Commission (ERC), which monitors market conditions, reviews tariffs, issues licenses, approves power purchases, and reviews development planning and investment in the electricity industry. Via a single-buyer model, Thailand’s state-owned utility (the Electricity Generating Authority of Thailand or EGAT) allows limited private sector participation in electricity generation while maintaining control over system planning, operation, and pricing.2ADB, supra.

EGAT owns and operates most of the country’s power generation capacity and all its transmission network. It operates the system and is the principal offtaker. It sells practically all of the energy it generates/purchases from private power producers and neighboring countries to two state-owned enterprises, the Metropolitan Electricity Authority (MEA) and the Provincial Electricity Authority (PEA), which then distribute the power to retail, commercial, and industrial consumers throughout Thailand. MEA and PEA own the distribution networks in their respective regions of operation. The rate at which EGAT sells electricity to MEA and PEA is set by the Energy Policy and Planning Office.3ADB, supra.

The government allows the private sector to participate in renewable energy generation. There are three different types of private power producers aside from EGAT: (1) Independent Power Producers (“IPPs”) generating more than 90 MW of capacity, Small Power Producers (“SPPs”) generating 10-90 MW capacity, and Very Small Power Producers (“VSSPs”) generating less than or equal to 10 MW of RE.4Wilailuk Okanurak & Wanwisar Nakarat, Renewable energy in Thailand, Linklaters LLP via Lexology (Dec. 30, 2018), https://www.lexology.com/library/detail.aspx?g=ff8dba22-6fd0-40a8-814d-770336b674dd. IPPs and SPPs can enter power purchase agreements with EGAT while VSPPs can sell power to MEA or PEA. Small and very small power producers are eligible for a feed-in tariff in addition to the wholesale electricity price.5ADB, supra.

Thailand imports electricity from the Lao People’s Democratic Republic and Malaysia.

Source: ADB: Thailand Energy Sector Overview

As of 2022 Thailand’s main electricity sources are gas (63.96%) and coal (19.85%). Solar’s percentage of the energy mix is 2.63% and wind is 1.57%.6Thailand Energy Country Profile, OurWorldinData.org, https://ourworldindata.org/energy/country/thailand (Accessed Aug. 3, 2023). The following charts illustrate Thailand’s electricity mix:

Source: OurWorldinData.org. Click to access interactive graphs.

Summary of RE Laws/Policies

General

The main laws and policies that govern renewable energy development in Thailand are:

  • 13th National Economic and Social Development Plan
  • 1992 National Energy Policy Council Act
  • National Energy Plan (“NEP”)
    • Power Development Plan (“PDP”)
    • Alternative Energy Development Plan (“AEDP”)
  • Energy Industry Act (“Energy Act”) B.E. 2550 (2007)
  • Renewable Energy Development Plan (REDP) 2008-2022
  • Energy Development and Promotion Act

The Power Development Plan (“PDP”) issued in June 2015 by the Ministry of Energy aims to increase Thailand’s renewable energy generating capacity, as does the Alternative Energy Development Plan 2015-2036 (“AEDP 2015”). An updated PDP, which covers strategies for maintaining and upgrading Thailand’s grid, was released in 2018 to cover 2018-2037.7Power Sector Transition in Krabi, Global Energy Monitor (GEM), https://www.gem.wiki/Power_Sector_Transition_in_Krabi. A new 2023 PDP is currently being developed with a greater focus on renewable energy, using the loss of load expectation (LOLE) method to manage power supply.8Yuthana Praiwan, New power plan will support renewables, Bangkok Post (Mar. 21, 2023), https://www.bangkokpost.com/business/2532566/new-power-plan-will-support-renewables.

Tariff Schemes

The Adder tariff scheme, which was paid on top of the retail electricity price, was introduced in 2007 and revised in 2009 and 2010. In 2012, the Feed-in-Tariff (FiT) scheme was established to replace Adder, setting tariffs at a fixed price. However, Adder is still applicable to operators who signed PPAs before the announcement of Adder’s discontinuance.9Linklaters LPP, supra.

In 2014, Thailand adopted a FiT scheme for VSPPs, to replace the old feed-in premium scheme.10Feed-in Tariff for Very Small Power Producers (VSPP) (excluding solar PV), IEA, https://www.iea.org/policies/5786-feed-in-tariff-for-very-small-power-producers-vspp-excluding-solar-pv (last updated Sept. 7, 2015). The FiT scheme was to be granted for 20 years except for power systems fuelled by landfill gas, which were only to receive support for 10 years.11IEA, supra.

Solar Incentives

Solar Farms

The government introduced a scheme for electricity generation up to 5MW from solar cells with a ground installation prototype for government agencies and agricultural cooperatives to be purchased by MEA, PEA, or the Electricity Welfare of the Royal Thai Navy, in accordance with a declaration issued on March 6, 2015 and a notification issued on September 17, 2015. The winning bidders in April 2016 were with the agricultural cooperatives, as government agencies lacked qualifications to obtain needed approvals required under the Private Investments in State Undertakings Act B.E. 2556 (2013) (“PISUA”), etc.12Linklaters LLP, supra. A second phase was enacted in 2017.

Solar Rooftops

The ERC has issued several rounds of notifications on the purchase of solar rooftop generated electricity from houses and commercial buildings/factories in 2013, 2015, and 2016 (to extend the Commercial Operation Date (“COD”)). The goal was to purchase 100 MW of electricity from houses and 100 MW from commercial buildings/factories. The initial goal in 2013 was not met for household solar rooftop generated electricity due to high costs of investment and the incentives not being attractive enough, which led to the second notification in 2015. As of June 30, 2016, the COD was achieved with a total of 6,166 projects and total generating capacity of 130 MW (82 MW from commercial buildings/factories and 48 MW from houses).13Linklaters LLP, supra

Comparison with Other ASEAN Nations

The following chart compares Thailand’s renewable energy regulatory framework with other ASEAN nations:

Source: REN21 and ASEAN Centre for Energy (ACE) via JSTOR.

Other References

Initial Critique of RE Laws/Policies

Currently, four different entities govern renewable energy policy in Thailand:

  • The Department of Alternative Energy Development and Efficiency under the Ministry of Energy
  • The Energy Policy and Planning Office
  • The Energy Regulatory Commission, and
  • The Electricity Generating Authority of Thailand

Due to the split in responsibility, analysts have observed functional overlap, fragmented governance of the sector, communication issues between central and provincial energy authorities, and lack of coordination across agencies.14Vakulchuk, Roman, et al. Thailand: Improving the Business Climate for Renewable Energy Investment. Norwegian Institute of International Affairs (NUPI), 2020. JSTOR, http://www.jstor.org/stable/resrep26569. Accessed 22 Aug. 2023; Sitdhiwej, Chacrit. “Renewable Energy Law and Policy in Thailand.” Renewable Energy Law and Policy Review, vol. 7, no. 2, 2016, pp. 184–89. JSTOR, http://www.jstor.org/stable/26256498. Accessed 22 Aug. 2023. To address the aforementioned issues, Thailand could set up a dedicated ministry for governing renewables.15Vakulchuk et al., supra.

The regulatory framework could also be improved by taking the following measures16Vakulchuk et al., supra.:

  • Expand fiscal incentives for investors by adopting tender mechanisms and production tax credits
  • Develop feed-in tariff and auction system further
  • Develop a robust purchasing framework for solar and wind energy
  • Establish priority entry for renewable energy companies in Thailand
  • Streamline company registration and issuance of investment licenses (possibly through a ministry of renewable energy, yet to be established)

Renewable Energy Targets

Renewable Energy Laws/Policies

General Policies

  • Thailand’s NDCs
  • National Energy Plan (NEP)
    • Framework for achieving net-zero and carbon neutrality goals. Contains Power Development Plan, Energy Efficiency Plan, Alternative Energy Development Plan, Oil Plan, and Gas Plan.
    • Power Development Plan (“PDP”) 2015
    • Power Development Plan (“PDP”) 2018
    • Thailand Alternative Energy Development Plan (AEDP) 2015-2036
    • Alternative Energy Development Plan (AEDP) 2018-2037
  • Energy Industry Act (“Energy Act”) B.E. 2550 (2007)
    • Info / More Info / PDF / Backup PDF
    • Established the Energy Regulatory Commission (ERC) to regulate the energy industry. Its duties include promoting the use of renewable energy.
  • Renewable Energy Development Plan (REDP) 2008-2022
  • National Energy Policy Council Act
    • Created National Energy Policy Council, the highest governmental body overseeing energy management. Aims to increase energy security by encouraging alternative energy sources , high efficiency technology, and community-based green projects.19GEM, supra.
  • Energy Development and Promotion Act
    • Renamed and redefined the duties and responsibilities of the Department of Energy Development and Promotion.20GEM, supra.
    • Replaced the 1953 National Energy Act.
  • 20-Year National Strategy 2018-2037
    • Thailand’s development framework.
  • 13th National Economic and Social Development Plan
    • Concrete implementation strategies to achieve the National Strategy’s goals.
    • PDF / Backup PDF
  • Climate Change Master Plan (2015-2050)
    • Long-term framework (policy, technical, budgetary) for climate change adaptation and sustainable, low-carbon growth.21GEM, supra.

Incentives for RE Development

  • ESCO Fund
    • Info / More Info (govt website) / More Info / Brochure (TH)
    • Aimed to foster expansion of the energy service market (ESCO) to encourage projects including RE projects.
  • Solar Hot Water
  • Regulations for the Purchase of Power from Very Small Power Producers
    • Info / PDF (unofficial translation, from mea.or.th)
  • Feed-in Tariff for Very Small Power Producers (VSPP) (excluding solar PV which is covered in the following policy)
  • Feed-in tariff for distributed solar systems
  • Adder/Feed-in-Tariff (FiT)
    • FiT introduced in 2012 to replace Adder
    • Info / More Info (about FiT)

Energy Efficiency

  • Energy Conservation Promotion Act
    • Defined duties of relevant government agency with respect to energy efficiency and energy conservation programs.22GEM, supra.
  • Energy Efficiency Development Plan

Contextual Laws/Policies

  • Electricity Generating Authority of Thailand (EGAT) Act
  • Subsidies for Electricity Bills 2023
  • Consumer support package (for fossil fuels)

Comments

The RISE indicator checklist states that Thailand’s legal framework does not allow for private sector ownership of renewable energy generation, but the Regulations for the Purchase of Power from Very Small Power Producers does in fact allow for private entities to generate renewable electricity.

References